ACO growth driven fastest by physicians

Private-sector adoption of accountable care organizations is a large part of their increased presence.

By — Posted July 2, 2012

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Physician groups, particularly independent practice associations, are increasingly taking the lead in accountable care organizations to assert more doctor control over them.

“It’s in a physician’s interest to go in this direction, because the market is moving in this direction,” said Phil Dalton, MPH, president and CEO of MDS Consulting, based in Torrance and Costa Mesa, Calif. It works with hospitals and medical groups to set up ACOs.

A report issued June 13 by Leavitt Partners, a consultancy based in Salt Lake City, found that 221 accountable care organizations operated in 45 states as of the end of May. This represented a 35% increase from the 164 in 41 states identified in September 2011 in a report released Nov. 29, 2011, by the organization.

Physicians led the growth based on the type of sponsoring entity, which is the organization that establishes the ACO’s structure and determines how earned bonuses will be distributed. The number with a hospital system grew 19% from 99 to 118. Those created by physician groups increased at a faster rate, going up 84% from 38 to 70. ACOs launched by health plans grew 7% from 27 to 29. None were organized by community groups in the original survey, but the more recent one counted four.

“The consistent growth in the number and variety of organizations adopting accountable care demonstrates the momentum of the ACO movement,” said Andrew Croshaw, a partner and managing director of Leavitt’s health care practice.

The American Medical Association’s ACO principles state that these entities must be led by physicians and put the interest of the patients first. Physician and patient participation should be voluntary, and independent doctors should be able to take part.

Professionals who help set up ACOs say those run in conjunction with a private insurer drove much of the growth in total numbers. The count of 221 found at the end of May included the 32 pioneer ACOs recognized by the Centers for Medicare & Medicaid Services in December 2011. It also included 27 other ACOs recognized by the agency in April, with some including private insurance partners as well as Medicare. The remaining 162 worked only with private insurers.

Those working within the ACO model said private payers allowed for more flexibility. Participants in the Medicare shared savings program must have a minimum of 5,000 members and meet 33 quality measures in four domains. Those arranged with private insurers can be designed for lower numbers and different benchmarks.

For instance, PinnacleHealth System, a nonprofit health system based in Harrisburg, Pa., announced June 13 the formation of an accountable care organization with Capital BlueCross. The insurer will provide resources such as nurses to coordinate care and technology to analyze where cost savings could be achieved. Pinnacle is looking to establish more of these arrangements with other insurers in the area and has no plans to apply to a government program at the moment.

“The government has a very strict formula,” said Chris Markley, Pinnacle’s senior vice president of strategic services. “Capital BlueCross is more flexible, and it was a very collaborative process to set up.”

Commercial insurers say they want to launch more ACOs, or models that are like ACOs but called something else.

For instance, Cigna announced May 29 that it was forming what it called a collaborative accountable care initiative with Granite Healthcare Network, a partnership among five independent charitable health care organizations in New Hampshire. The network will employ registered nurses to coordinate care using data provided by Cigna. The insurer will pay for care coordination services, and the network may earn bonuses for meeting quality targets and lowering the overall cost of care. Care recommendations are derived from claims data, although decisions to follow through are made by physicians.

“The claims-based information is a starting point,” said Dick Salmon, MD, PhD, Cigna’s national medical director for performance measurement and improvement. “A physician decides what is appropriate for the patient. Our goal is to identify areas that need a second look.”

Cigna says its collaborative accountable care initiative is an “enrichment” of the ACO and patient-centered medical home models and doesn’t group it with other ACOs. Cigna has 32 of these programs up and running. The company is aiming to have 40 by the end of the year and 100 by the close of 2014.

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Who runs the ACO?

The number of ACOs grew to 221 in 45 states as of the end of May, according to a report released June 13 by Leavitt Partners, a consultancy based in Salt Lake City. A small majority of ACOs are run by hospitals.

Number of ACOsSponsoring organization

118 Hospital system
70 Physician group
29 Health plan
4 Community-based organization

Sources: “Growth and Dispersion of Accountable Care Organizations: June 2012 Update,” Leavitt Partners June 13

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External links

“Growth and Dispersion of Accountable Care Organizations,” Leavitt Partners, Nov. 29, 2011 (link)

“Growth and Dispersion of Accountable Care Organizations, June 2012 update,” Leavitt Partners, June 13 (link)

Accountable care organization principles, American Medical Association (link)

“Collaborative Accountable Care: Cigna’s Approach to Accountable Care Organizations,” Cigna Corp., April 2011 (link)

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